Brent crude oil for October and November gained more $1/bbl on Aug. 24. Light, sweet crude oil for October delivery rose nearly 90¢/bbl to end a week that marked the US benchmark’s best week for price increases since June.
Oil prices fluctuated in Aug. 27 trading, which analysts attributed to ongoing concerns about US-China trade disputes. Representatives of the Organization of Petroleum Exporting Countries and other major oil producers met in Vienna Aug. 27 to talk about the production levels.
“The tensions and differences of opinion within the group relating to the production quotas were visible at the official semiannual meeting in June,” Commerzbank analysts said in a recent note about OPEC. “These tensions are likely to have increased if anything in view of the decision to step up production again and given the sanctions against Iran.”
As of the Aug. 24 settlement, US prices remain below a June 29 front-month settlement of $74.15/bbl. Some analysts anticipate prices will go higher than current levels. They believe higher production from Saudi Arabia and other major producers will not be enough to make up for lost Iranian crude exports.
US President Donald Trump in May announced a US exit from an international agreement that lifted sanctions against Iran in exchange for its cooperation on its nuclear program. New US sanctions could result in a reduction of more than 1 million b/d of Iranian crude oil exports by November. Trump’s administration is asking other countries to stop buying Iranian crude.
“There is no particular headline [driving crude higher] but from a broader financial perspective, the dollar has been retrenching,” said Harry Tchilinguirian, BNP Paribas global head of commodity markets strategy.
Oil is traded in US dollars so a stronger US dollar, as experienced last week, makes crude oil less expensive for buyers starting out with other currencies.
Energy prices
The light, sweet crude contract for October delivery on the New York Mercantile Exchange gained 89¢ to $68.72/bbl on Aug. 24. The November contract increased 83¢ to settle at $68.36/bbl.
The NYMEX natural gas price for September decreased nearly 5¢ to $2.91/MMbtu. The Henry Hub cash gas price held unchanged at $2.96/MMbtu.
Ultralow-sulfur diesel for September gained nearly 2.7¢ to remain at a rounded $2.20/gal. The NYMEX reformulated gasoline blendstock for September rose about 2¢ to a rounded $2.08/gal.
Brent crude oil for October increased $1.09 to $75.82/bbl on London’s International Commodity Exchange. The November contract increased $1.04 to $76.18/bbl. The gas oil contract for September was $681/tonne on Aug. 24, up $14.25.
OPEC’s basket of crudes for Aug. 24 was $74.02/bbl, up $1.01.
Contact Paula Dittrick at [email protected].
